4 November 2025
Companies around the world face risks from their reliance on nature
By Esther Whieldon, Shirley Yap, Lokesh Raikwar, Gautier Desme, and Joerg Rueedi
highlights
New research from S&P Global Sustainable1 finds that 57% of the world’s largest companies that make up S&P Global 1200 have a significant nature dependency risk across their direct operations. This risk represents how companies rely on ecosystem services as well as whether those services are vulnerable to disruption — interrupting business operations in turn.
The analysis also finds that 71% of companies in that universe have at least one asset located in a Key Biodiversity Area (KBA).
At the same time, corporate pledges to protect nature remain rare. Only 8% of companies assessed globally in the S&P Global Corporate Sustainability Assessment (CSA) have a commitment to protect biodiversity.
This gap underscores the room for growth in corporate sustainability strategies to better integrate nature into operations and risk management. This is a topic we expect will be in sharper focus at the upcoming COP30 Climate Change Conference, which takes place in November 2025 in the Brazilian Amazon rainforest.
Most of the world's largest companies are significantly dependent on nature in their operations even as the biodiversity and ecosystems underpinning those resources are declining due to land use change, overexploitation and climate change. This reliance on the ecosystem services nature provides, combined with the declining resilience of those services, is creating nature dependency risk for listed companies.
S&P Global Sustainable1 data shows that 57% of companies in the S&P Global 1200 — an index that covers the 1,200 largest companies across North America, Europe, Asia, Australia and Latin America — have a significant nature dependency risk across their direct operations.
A look at a broader universe of companies in the S&P Global Broad Market Index (BMI) shows similar levels: 62% of companies in this index have a significant nature dependency risk across their direct operations. The S&P Global BMI includes approximately 14,000 companies from across dozens of developed and emerging markets.
Beyond the dependency that these publicly traded companies have on ecosystem services, nature underpins much of the wider global economy. About 55% of global GDP, equivalent to an estimated $58 trillion, is moderately or highly dependent on nature, according to 2023 research by PwC.
At the same time, global biodiversity is in rapid decline due to climate change and human activities such as clearing land for agriculture and urban development, overexploitation of natural resources, and invasive species and diseases.
Nature will be in the spotlight at the upcoming 30th Conference of the Parties (COP30) to the United Nations Framework Convention on Climate Change, which is being held in Belém, Brazil, in the Amazon rainforest Nov. 10-21. The COP30 presidency has made the topic of stewarding forests, oceans and biodiversity one of six key themes of the conference, with a particular focus on investments to halt or reverse deforestation and to conserve, protect and restore nature and ecosystems.
Understanding ecosystem services and nature dependency risk
Business activities rely on the ecosystem services that nature provides in many ways. For example, ecosystem services provide wood for timber harvest; ground water or fresh water for drinking, cooling power plants or irrigation; and animal or plant fibers for fabrics or fertilizer. Nature also provides ecosystem services by modulating climate and hydrological, ecological and soil processes. Examples of these ecosystem services include pollination, carbon sequestration, erosion control, flood and storm protection, disease control and soil quality.
From a company’s perspective, nature dependency risk arises from the combination of business reliance on an ecosystem service and that service’s resilience — its ability to withstand overexploitation or harm from factors such as land use change or climate change. For example, a data center’s high reliance on fresh groundwater resources, combined with the local aquifer’s declining capacity due to drought, would result in nature dependency risk for that asset. At a macro level, healthy and diverse ecosystems play a key role in absorbing carbon emissions and helping both the natural world and human society adapt to the physical impacts of climate change.
Companies and investors are in the early stages of understanding the risks these issues pose to business. The S&P Global Sustainable1 Nature & Biodiversity Risk dataset assesses nature-related impacts, dependencies and dependency risk across companies' direct operations at the asset, company and portfolio level. Our analysis of the S&P Global BMI finds that companies in the index have particularly high dependency risk on two related ecosystem services: mass stabilization and erosion control, and flood and storm protection.
The first — mass stabilization and erosion control — includes things like vegetation on slopes that prevents avalanches and landslides; or mangroves, sea grass and macro-algae that provide erosion protection for coasts. This is the top dependency risk for five sectors in the S&P Global BMI: consumer staples, financials, healthcare, information technology and materials.
The ecosystem service “flood and storm protection” is provided by the sheltering attenuating effects of natural and planted vegetation. Mangrove forests that grow along tropical coastal wetlands, for example, reduce waves and storm surges and can be a first line of defense against flooding. Flood and storm protection is the top dependency risk for five sectors in the S&P Global BMI: communication services, consumer discretionary, energy, industrials and utilities.
The high dependency risk related to these services speaks to the impact of land-use change and climate change on ecosystem services. Commercial development and land-clearing reduces vegetation that otherwise would provide a buffer from damaging winds or floods that can accompany storms. Reduced vegetation also makes landslides more frequent, as root networks are no longer present to keep erosion in check. Nature’s ability to provide these services — in other words, their resilience — will diminish with every degree of global warming, the Intergovernmental Panel on Climate Change (IPCC) found in its 2023 synthesis report.
Bio-remediation is another key ecosystem service for companies and is the top dependency risk for the real estate sector. Bio-remediation occurs when living organisms such as micro-organisms, plants, algae and some animals degrade, reduce and/or detoxify contaminants from soil and water. The living organisms typically do this by metabolizing the contaminant and converting it into a less toxic form, such as carbon dioxide or water. Bio-remediation occurs naturally but is also often harnessed as a relatively inexpensive way to clean up hazardous waste sites and toxic spills. For example, the US Environmental Protection Agency has used bio-remediation to clean up hundreds of contaminated sites.
Another ecosystem service that tends to be a key dependency risk for companies is climate regulation. Climate regulation in this context refers to the ecosystem service nature provides to regulate or modulate the global or local climate. It can help companies by acting as a carbon sink to absorb and store carbon emissions from the atmosphere and can also ease the local physical impacts of climate change. On a global scale, climate regulation is provided by nature through the long-term storage of carbon dioxide in soils, biomass and oceans. And on a regional level, the climate is regulated by ocean currents and winds. At local and micro levels, vegetation can modify temperatures, humidity and wind speeds.
Identifying assets in areas that are key to preserving biodiversity
While understanding nature-related dependencies can help a company understand its risk profile, investors, regulators and groups drafting disclosure frameworks are also asking for details about how company operations impact nature. Understanding impact can also more fully inform a company’s nature risk management strategy: The impact from a business asset on a local ecosystem service that it relies on can degrade that service’s resilience, raising dependency risk in turn.
One early step a company can take to assess its nature impact is to understand how much it operates in areas that are important to biodiversity. S&P Global Sustainable1 data shows that 71% of companies in the S&P Global 1200 index and 27% of companies in the S&P Global BMI have at least one asset located in a Key Biodiversity Area (KBA). KBAs are sites contributing significantly to the global persistence of biodiversity. KBAs are identified at the national, sub-national or regional level by local stakeholders based on standardized scientific criteria and thresholds.
In the S&P Global 1200, the energy sector had the highest percentage of companies with at least one asset in a KBA. The energy sector includes oil and gas companies, which own and control millions of miles of pipelines around the world, as well as coal mining companies. The materials sector, which includes metals and mining companies, had the second-highest percentage of companies with at least one asset in a KBA. Utilities in the S&P Global 1200, which include electric, gas and water, came in third. As providers of electricity and natural gas to customers, utilities have footprints, especially their transmission lines, that traverse millions of miles.
A smaller percentage of companies in the S&P Global BMI — an index with roughly 10x more constituents than the S&P Global 1200 — had at least one asset located in a KBA. Within this universe, utilities had the highest percentage, followed by energy companies and financials.
As KBAs are identified by the scientific community based on biological criteria and thresholds, the designation does not carry legal protections. However, governments have been known to use KBAs as reference points in establishing legally protected areas. Protected areas are geographically defined spaces that are managed through legal or other effective means to achieve the long-term conservation of nature with associated ecosystem services and cultural values.
Protected areas include national parks, wilderness areas and nature reserves managed by local, state or national governments. A protected area can also be an area of land that is owned or managed by private entities, NGOs, for-profit organizations or Indigenous peoples.
The passage of a new global biodiversity framework at the UN's COP15 biodiversity conference in December 2022 prompted governments around the world to assess and expand existing protected areas and designate new ones. Under the 2022 Kunming-Montreal Global Biodiversity Framework, governments pledged to achieve "effective conservation and management of at least 30% of the world’s lands, inland waters, coastal areas and oceans" by 2030. This so-called 30 by 30 agreement "prioritizes ecologically-representative, well-connected and equitably-governed systems of protected areas and other effective area-based conservation."
Since the framework was agreed, dozens of countries have formed KBA National Coordination Groups to review and expand their programs. Eleven countries have completed a review of their KBA programs, which prompted a 70% increase in the number of KBAs per country on average, according to a 2024 annual report on the KBA Programme. The program is led by 13 international conservation organizations.
Protected areas and KBAs sometimes overlap. A 2025 research article in the journal Geography and Sustainability found that only one-fifth of all KBAs are in protected areas. S&P Global Sustainable1 data shows that about 87% of companies in the S&P Global 1200 have at least one asset in a protected area. In this universe, the utilities sector has the largest number of companies with at least one asset in a protected area (94%), followed by the materials sector (93%). The industrials, energy and information technology sectors were tied in third place at 92% each.
Quantifying nature impact
Companies can go further than taking stock of the business activities that occur in sensitive ecosystems and biodiverse areas by quantifying their nature impact.
A company's land use footprint is one key indicator of the potential scope of impact from its operations. In 2022, companies in the S&P Global BMI collectively used an estimated 416 million hectares of land for their direct operations — such as farms, factories, mines, retail stores, hospitals and office space. Companies in the consumer staples sector have the biggest total land use with 89.2 million hectares of land, followed by the industrials and energy sectors. For reference, 89.2 million hectares is nearly twice the size of Sweden.
However, land use is more detrimental in some parts of the world than others, based on the local biodiversity of species and the ecosystem services that the local environment provides. To measure the direct operational impact a business’s assets have on nature, the Nature & Biodiversity Risk Dataset includes an ecosystem footprint metric (see “Methodology” for further explanation). This composite metric combines an asset’s land use, the proportion of land degradation the asset creates and the significance of local ecosystems in that area. Ecosystem footprint is measured in terms of hectares of Highest Significant Area equivalent (ha HSA eq.), which express impact in terms of degrading one hectare of fully pristine rainforest — and all the ecosystem services, biodiversity and natural capital it holds. Ha HSA eq. functions as a normalized metric for natural capital at risk.
Our analysis shows that companies in the S&P Global BMI collectively have an ecosystem footprint of 45.2 million ha HSA eq. from which they generated an estimated $62.9 trillion in revenue in 2022. In other words, for every $1 million of revenue, about 0.72 hectares’ worth of pristine nature was fully degraded.
In this analysis, ecosystem footprint is measured for the direct operations of the publicly listed companies included in the S&P Global BMI index. Industrials in this universe have the largest total ecosystem footprint, followed by materials, energy and consumer staples. This is a reflection of the directly owned assets and activities of these sectors. From the perspective of the entire global economy, agriculture is the largest human activity driving land use change and has the largest impact on nature. This impact may be present in listed companies’ supply chains but not in their direct operations, akin to Scope 3 greenhouse gas emissions.
Nature impacts and dependencies in corporate disclosure
Disclosure regulations and voluntary frameworks consider several indicators associated with nature dependencies and impacts. Overall, there is a growing expectation from investors and some jurisdictions that companies begin the journey of understanding, measuring and addressing their nature dependencies and impacts.
The Taskforce on Nature-related Financial Disclosures (TNFD) in September 2023 published its final recommendations for nature-related risk management and disclosure by companies and financial institutions. Since then, 620 organizations from over 50 countries or areas and $20 trillion in assets under management have committed to getting started with nature-related reporting aligned with at least one TNFD recommendations, the organization said in its 2025 status report.
Moreover, the International Sustainability Standards Board (ISSB) is exploring whether to adopt standards related to biodiversity, ecosystems and ecosystem services. The ISSB signed an MOU with the TNFD to share knowledge, research and technical expertise toward the ISSB's efforts.
As for mandatory requirements, the EU's Sustainable Finance Disclosure Regulation (SFDR) requires financial market participants and financial advisers based in the EU to disclose the share of their investments in companies that have sites or operations in or near "biodiversity-sensitive areas." SFDR defines biodiversity-sensitive areas as the European Natura 2000 network of protected areas, UNESCO World Heritage sites and KBAs. The EU is currently in the process of simplifying its SFDR regulations and the related EU Taxonomy.
The EU's Deforestation Regulation (EUDR) could also impact how companies approach nature, although the implementation of the law has been delayed repeatedly. The European Commission on Oct. 20, 2025, proposed delaying implementation of the rule for micro- and small enterprises until the end of 2026, with the law continuing to take effect for larger entities in December 2025. The EUDR requires that certain agricultural commodity-related products placed on the EU market, whether imported or domestically sourced, are not tied to deforestation. The regulation covers palm oil, cattle, soy, coffee, cocoa, timber, rubber and any products derived from those commodities. Under the rules, companies selling these commodities or derived products in EU markets must apply due diligence measures to ensure that the products do not originate from recently deforested land or have contributed to forest degradation.
Meanwhile, corporate pledges to protect biodiversity remain rare. Only 8% of companies assessed globally in the 2024 S&P Global Corporate Sustainability Assessment (CSA) have a commitment to protect biodiversity. The data shows wide variations among sectors in commitments to protecting biodiversity. Utilities have the highest percentage of biodiversity-related commitments (29%), followed by materials companies (12%), communication services (11%) and consumer staples (10%).
Looking forward
Many companies have significant dependencies on the ecosystem services nature provides, yet a relatively small share of businesses have set targets related to preserving nature. This gap underscores the room for growth in corporate sustainability strategies to better integrate nature into operations and risk management.
Failure to understand dependencies while at the same time operating in a way that is damaging to nature at the operational level further puts companies at risk of degrading those ecosystem services to the point that the services are no longer available — thereby creating risk.
COP30 in Brazil will present an opportunity for exploring new ways to integrate nature into climate conversations and for nations and businesses to work together to better understand how these systems are deeply connected and to advance nature-friendly climate solutions.
Methodology
The terms “nature” and “biodiversity” are often used interchangeably. In this paper — and in line with the TNFD and the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) — we define nature as the natural world with an emphasis on the diversity of living organisms and their interactions among themselves and with their environment. This definition includes categories such as biodiversity, ecosystems, ecosystem structure and functioning, as well as the biosphere and living natural resources, amongst others.
Natural capital refers to the stock of renewable and non-renewable natural resources — ecosystem assets and their biodiversity, and abiotic resources such as water, soils, minerals and the atmosphere — that generate flows of benefits (ecosystem services) underpinning the economy and the climate system.
We define biodiversity as the variability among living organisms from all sources, including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems. Biodiversity is a component of nature.
In this paper, we focus on nature, and on terrestrial ecosystems in particular, which accounts for the majority of the ecosystems impacted by human activities, and look at it through a double-materiality lens:
Understanding a company’s nature dependency risk
For a dependency on an ecosystem service to translate into a material risk for a company, the dependency must exist in a location where the service itself is at risk of potential disruption. For example, a dependency on water only translates into a risk if the availability of water in a particular location is potentially limited due to water stress. To quantify these material dependency risks, we focus in this analysis on S&P Global Sustainable1’s nature dependency risk score, which considers the level of reliance that a business has on 21 different ecosystem services (i.e. dependency, or exposure to risk), as well as the expected resilience risk of the ecosystem providing these services, where these businesses are operating around the world (i.e. likelihood of risk). These risk indicators leverage both sector and company-specific information, as well as location-specific information to estimate the risks of their direct operations. We consider companies to have significant dependency risk if they have a nature dependency risk score over 0.6 (where 0 represents no dependency risk and 1.0 represents very high dependency risk).
Understanding a company’s impact on nature
There are different ways a company may have an impact on nature: It may have a high absolute land footprint; it may have a high impact on the integrity of an ecosystem; or it may conduct activities in significant areas — that is, areas of environmental significance in terms of preserving biodiversity and nature's contribution to people via ecosystem services on a local and global scale.
Because companies’ impacts are often multi-dimensional, we focus our analysis of a company's impact on nature on the S&P Global Sustainable1 headline footprint indicator — the ecosystem footprint, a significance-weighted and condition-adjusted area footprint of an asset or company's operations which accounts for the three dimensions of impact. It provides a decision-useful metric that enables comparison between business operations in any locations and calculates an impact measured in hectares-equivalent of the most pristine and highest significant area (ha HSA eq.). This approach expresses any impact, across any ecosystem globally, into a single metric similar to expressing different greenhouse gases as CO2-equivalent so they can be aggregated and compared across assets, companies or geographies.